Foreign investors account for one in eight of all property sales in London, but contrary to popular opinion, almost none are being left empty.
The London School of Economics (LSE), which co-published the report with the Mayor of London and the University of York, said foreign investors made up 13.2 per cent of all property transactions between 2014 and 2016.
But there was “almost no evidence” to suggest that properties were being left entirely empty. It added that that the percentage of vacant properties in London was certainly less than one per cent.
“There may be an inaccurate perception that units are empty because the private units in a development will usually complete construction sometime after the affordable homes, giving a mistaken impression of vacancy,” said the report.
“Further, once large developments are complete, it can take up to two years for occupancy rates to build up, and so homes may be vacant for an initial period before being lived in full time, which may account for perceptions that homes are left empty.”
The report found that the majority of purchases were made by people or companies from just four countries all in south-east Asia: Hong Kong, Singapore, Malaysia, and China.
Foreign buyers were also far more likely to buy lower-value homes than top-end property. More than half of sales to foreign buyers were homes worth between £200,000 and £500,000, while one-third were worth between £500,000 and £1 million.
Around 16 per cent were valued at between £1 million and £5 million, while just one per cent of transactions were worth more than £5 million.
It said the highest investment areas included Westminster, Tower Hamlets and Greenwich.
The LSE added that many developers rely on off-plan sales to help fund the early stage of development, get funding, and reduce risk.
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